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The County Farms Estate Annual Report 2018/19 PDF 2 MB CT/19/80 Farms Estate Committee 9 September 2019 The County Farms Estate – Annual Report 2018/19 Report of the County Treasurer 1 Background/Introduction 1.1 This is the twenty-eighth annual report of the County Farms Estate and the ninth year in this revised format since the Devon County Council Farms Estate Strategic Review of March 2010. 1.2 This report is divided into the following sections: Committee Functions Financial Performance Estate Management Performance Other Notable Estate Achievements and Events 2 Meetings and other activities of the Farms Estate Committee 2018/19 2.1 The Farms Estate Committee met on 15 May, 3 September, 3 December 2018 and 25 February 2019. In addition to the usual financial and management matters other issues discussed by the Committee included: - Annual Report 2017/18 - Monitoring of tenants on initial Farm Business Tenancy’s - Requests for extensions of tenancy - Requests for Landlord’s consent for Tenant’s Improvements - Improving the marketing exposure of the County Farms Estate - The Agriculture Bill and Policy Statement - DEFRA Clean Air Strategy 2018 - Tenant’s Training Academy 2.2 An interview panel met on five occasions during the year to interview tenants for Chapel Farm, Marwood; Prixford Barton Farm, Marwood; East Catkill Farm, Rose Ash; Furze Cottages Farm, Ashreigney; Fairfield Farm, Denbury; Churchlands Farm, Ermington; Ten Oaks Farm, Roborough; Moorhouse Farm, Bovey Tracey; and Coppa Dolla Farm, Denbury. 2.3 The Chairman, a second member of the Committee and the Senior Land Agent also visited the Parishes of Braunton, Churchstow, Bickleigh and Down St Mary to undertake tenant’s monitoring visits. 2.4 The County Council Chairperson, Councillor Caroline Chugg, invited dignitaries, including the High Sheriff of Devon and the Lord Lieutenant of Devon and all the County Farms Estate Tenants to a civic reception at County Hall on 27 November 2018 to Celebrate the Estate and many of its successful achievements. 3 Finance 3.1 The financial performance of the Estate is again analysed in four areas, namely revenue income and expenditure, capital receipts and capital investment. 3.2 The Estate revenue budget outturn statement for the year ending 31 March 2019 is appended (Appendix A). Details of some of the key result areas for the three previous trading years have been included to offer some form of trend comparator analysis. 3.3 Revenue Income 3.3.1 Rental income from the Estate in 2018/19 was £1,075,411 compared with a target of £1,074,000. 3.3.2 Miscellaneous income totalled £33,275 compared with a target of £40,000. 3.3.3 Therefore total income secured was £1,108,686 against a target of £1,114,000. Revenue 2015/16 2016/17 2017/18 2018/19 Income Rental £965,357 £1,093,939 £1,055,448 £1,075,411 Miscellaneous £41,949 £34,458 £42,505 £33,275 Total £1,007,306 £1,128,397 £1,097,953 £1,108,686 Revenue 2015/16 2016/17 2017/18 2018/19 Income Analysis Actual £1,007,306 £1,128,397 £1,097,953 £1,108,686 (a) Per Farm £14,599 £16,354 £16,146 £17,056 (b) Per Hectare £259 £291 £283 £287 (c) As a % of 96% 105% 101% 99.5% Target 3.4 Revenue Expenditure 3.4.1 The target spend for 2018/19 on programme and unforeseen repairs and maintenance was £310,000 of which 68% (£210,000) was planned and 32% (£100,000) was unforeseen. 3.4.2 There was an overall actual spend of £321,868 on repair and maintenance of which 75% (£241,666) was planned maintenance and 25% (£80,202) was unforeseen and reactive work. It is noted that significant inflationary pressures within the construction industry, is putting immense strain on this budget and far less work is capable of being delivered year on year for the same budget provision. Expenditure 2015/16 2016/17 2017/18 2018/19 Programme £126,141 £190,461 £227,711 £241,666 Unforeseen £114,810 £145,392 £80,888 £80,202 Total £240,951 £335,853 £308,599 £321,868 Maintenance 3.4.3 £264,681 was spent in total on professional fees relating to Estate Management, Farmwise Devon at the County Show and the October Event, Tenants Training Academy, and the procurement of repairs, maintenance, compliance management, service term contracts and other works. It is noted that in 2018/19 NPS took on more responsibility for Farmwise and procured a far higher than normal volume of farm relettings than experienced in a normal year. 3.4.4 £17,713 was spent on servicing plant and equipment on the Estate including private water supplies, boilers, electrical wiring systems, sewage treatment plants etc owned by the Landlord. This is only set to rise as more plant and equipment is installed. 3.4.5 £7,548 was spent on roadside tree surgery works arising as a consequence of periodic surveys and other ground maintenance works. This cost is set to rise in future years as the health of Devon’s trees deteriorates and the frequency of inspections increases. 3.4.6 £11,192 was spent on Landlord’s health and safety improvements, removing and replacing asbestos and demolishing redundant buildings. 3.4.7 £11,550 was spent on condition surveys to help inform planned maintenance programmes and to manage landlords risks associated with the Defective Premises Act 1972 and Occupiers Liability Acts 1957 and 1984. 3.4.8 £25,038 was spent on compensating tenants for fixtures, fittings and improvements at end of tenancy. 3.5 Revenue Surplus 3.5.1 A revenue surplus of £411,721 was achieved compared with a target of £414,000. Revenue Surplus 2015/16 2016/17 2017/18 2018/19 Target £337,000 £362,000 £382,000 £414,000 Actual £325,571 £389,442 £393,682 £411,721 As a % of Target 97% 108% 103% 99% 3.6 Running Costs 3.6.1 Running costs for 2018/19 were £432,284 (excluding management fees) against a target of £470,000. The reduction in in-year spend principally related to a significant saving on expenditure on Health & Safety works, redundant buildings and asbestos removal. Running Cost 2015/16 2016/17 2017/18 2018/19 (d) Per Farm £6,159 £7,300 £6,900 £6,650 (e) Per Hectare £109 £129.79 £121.15 £112.00 (f) As a % of 42% 45% 43% 39% Income 3.7 Management Costs 3.7.1 Management costs for 2018/19 were £264,681 against a target of £230,000. It is noted that in 2018/19 NPS took on more responsibility for Farmwise and procured a far higher than normal volume of farm relettings than experienced in a normal year. Management Cost 2015/16 2016/17 2017/18 2018/19 (g) Per Farm £3,739 £3,409 £3,456 £4,072 (h) Per Hectare £66 £60.62 £60.68 £68.44 (i) As a % of 26% 21% 21% 24% Income 3.8 Capital Receipts 3.8.1 In 2018/19 the Estate generated £2,398,000 from the sale of land adjacent to Cumberland Way (Monkerton); land adjacent to Exeter College, Monkerton; Part Cordwents Farm, Halberton; Ogbeare Woods, Gulworthy; and Firsdon Barns, Ashreigney. Capital Receipts 2015/16 2016/17 2017/18 2018/19 Actual £3,813,001 £1,476,115 £11,130,000 £2,700,644 3.8.2 At year end a further 5 properties were ‘sold subject to contract and planning’ with a potential capital receipt value of £4,523,621 expected to be received in 2019/20. 3.9 Capital Investments 3.9.1 Capital investment amounted to £1,365,740. Investment was made in one slurry and dirty water storage system and ten farmhouse renovation and improvement schemes. 3.9.2 At year end a total of £558,337 of capital funding was committed to previously approved schemes on the Estate which has been carried forward to the new financial year. It is anticipated this money will be spent in 2019/20. 3.9.3 Two insurance claims were made by the Estate in 2018/19. One building was badly damaged by fire and another building damaged beyond repair by excessive snow load. 3.9.4 In future years the Estate is likely to require ongoing capital investment in: (i) Further ongoing farmhouse renovation and improvement works (ii) Meeting the requirements of the Clean Air Strategy (iii) New sewage treatment plants (iv) Renewable energy, energy efficiency, carbon offsetting and sequestration (v) More onerous electrical regulations for farm buildings 4 Net capital contribution to the Corporate Capital Programme 4.1 After the County Farms Estate inward capital investment expenditure is deducted from the capital receipts generated by the sale of surplus Estate assets, a net capital contribution of £1,032,260 was made by the Estate to the corporate capital programme in 2018/19. Net Capital 2015/16 2016/17 2017/18 2018/19 Contribution Actual £2,559,000 £368,421 £10,351,401 £1,032,260 4.2 In addition to the direct contribution of capital receipts, the Estate also contributed to corporate priorities by way of land provision at no cost to the Highways, Infrastructure Development & Waste Service: (i) Land at Moorhouse Farm, Bovey Tracey – 0.54 hectares of land used for tree planting to mitigate loss of dormouse habitat unavoidably caused by the A382 highway improvement programme. 5 Estate Management Performance 5.1 The achievements for 2018/19 are analysed, as on previous occasions, in two areas – namely tenant matters and property matters. 5.2 Tenant Matters One tenant has progressed off the Estate to a larger tenanted farm in the private sector.
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